Rent lowered for RoughRiders in new lease deal

CEDAR RAPIDS - The Cedar Rapids RoughRiders will have their yearly rent at the Cedar Rapids Ice Arena reduced under a lease that still needs to be approved by the Cedar Rapids City Council.

The City Council last night was scheduled to set a public hearing for next Tuesday to consider the lease deal with Newco Riders LLC.

Newco Riders - a six-member group that includes RoughRiders head coach/general manager Mark Carlson and his wife - purchased the junior hockey franchise from a Chicago group last summer and signed a letter of intent with the city, spelling out terms for a 10-year lease effective June 1, if approved.

The club agreed to spend $500,000 on arena improvements - which it has - in exchange for 10 percent of arena concessions revenue and a cut in yearly rent from $158,000 to $90,000. But Five Seasons Facilities Commission Chairman Patrick DePalma said last night Newco Riders informed him in January “they would be unable to honor the old letter of intent and ... were looking at taking the team out of Cedar Rapids.”

DePalma said Newco Riders contacted city officials, including Mayor Ron Corbett and City Manager Jim Prosser, in February about wanting to keep the team in Cedar Rapids but needing financial assistance. That led to a lease agreement in which the RoughRiders will pay $90,000 in rent the first year and $70,000 thereafter. The lease runs through 2014 with additional five-year options.

“In regards to the lower lease payments, these are things that needed to be done in order for us to be a viable operation,” said RoughRiders CEO Jeff Jauch. “This is a good thing for us and the city.”

“We did what we could to come to an arrangement,” DePalma said. “I expect there will be questions. Can we do better? What other options are available to us? ... Financially, if we had no team, it'd be worse for the city.”

Scott Schoenike, executive director for Venuworks, which runs the Ice Arena for the city, called the rent about average for USHL teams but noted the Riders get 100 percent of advertising and arena suite rentals, which is uncommon. He said the lease returned about $7,000 profit to the city last year, but under the new deal the city will get enough to cover arena debt payments.

According to the lease, the city is negotiating with the Cedar Rapids Kernels to provide concessions. National company Sodexho's concessions contract is expiring.